Cuba, the Black Market in the Crosshairs

It is the lifeline for many. The underground market supplies about 60% of the products needed by a majority of the population. When the island was living through the silent battle, the “special period,” underground sales provided what the depressed state could not.

Adela Bencomo, a 73-year-old housewife has always purchased cooking oil, beef, chicken, high quality fish, and powdered milk for her grandchildren in the black market. They had lower prices. And often, your groceries were brought right to your door. Now, during this hot May 2010, much has changed.

For months now, neighborhood vendors have not been able to sell anything. Every day their anxious customers ask how long the situation will last. They all respond the same way: “Times are hard.”

Due to the shortages in the informal economy, many families are using their funds sent from abroad to buy what they need in convertible currency shops, says Adela, while waiting in line at the butcher shop to buy the half pound of chicken per person rationed by the state.

After 2008, when the country was devastated by three powerful and furious hurricanes, the governement of General Raul Castro unleashed a major crackdown on “illegal vendors.”

Anyone caught profiting from selling food was sentenced, in summary 25-minute trials, to a two-year prison sentence. It was very dangerous to walk down the street with 5 kilos of rice or a dozen fresh eggs.

Anyone carrying a backpack was detained by the police. Being young was enough to arouse suspicion. Being black marked you. After unrelenting harassment by law enforcement, the tide changed.

But the state maintained its stranglehold on warehouses, businesses, and shops, the principal source of provisions for those who sell food underground.

And so the well has begun to dry up. The black market is an important industry in countries going through economic hardship. In Cuba, to buy clothes, personal hygiene products, and items like cooking oil, cheese, or quality sweets, you must have hard currency.

Around 70% of all people receive euros or dollars from their relatives scattered around the world. But these remitances are not enough to purchase in convertible currency the food needed for basic survival, as well as shoes, clothing and other things, in adequate quantities.

To make matters worse, since 2004 the government, which is always talking of its generosity with the people, has charged a “revolutionary tax” of 20% on the USD and 8% on the Euro.

In addition, since then, they have raised prices on basic goods, which were already very expensive. Currently, all goods sold in convertible currency are taxed at around 400 percent.

It is logical, then, for people to resort to the black market. Due to police harassment, the black market is in a tailspin and this has created a headache for more than one person. Forty-nine-year-old Rosa Duarte is a good example.

“I don’t know what I am going to do, I try to stretch the 100 dollars my daughter sends me from the U.S. every month, but it is barely enough to cover the necessities. If the informal economy continues to dry up, I will be left with two options: ask my daughter for more money or ask for help in the streets,” she says with a certain irony.

And that is no joke. If something that ran as smoothly as the black market begins to falter, the common person’s troubles are only going to increase.

Add to that insulting salaries, which are barely adequate to buy a few vegetables and what is rationed, meager quantities that do not last 10 days. What’s worse is, there is no solution in sight.